You Better Be Ready For The Next Galleon-Sized Insider Trading Probe, Because It’s Here

insider trading

The financial industry is about to get rocked by new insider trading charges, the Wall Street Journal reports.

One analyst at Neuberger Berman Group LLC, a mutual fund firm, and traders who worked at hedge funds Diamondback Capital Management LLC and Level Global Investors LP could see charges filed against them in just a couple of weeks.

The two hedge funds had their offices raided a year ago.

Diamondback and Global Investors had billions of dollars in assets, but that isn’t what makes this investigation bigger and badder than any before it. What makes this probe stand out is the fact that Neurberger Berman doesn’t just service the uber wealthy, the mutual fund services individual investors with varied economic means and manages about $180 billion in assets, including mutual funds and investments in hedge and private-equity funds.

Here’s how the insider trading allegedly worked:

Two former analysts at Level Global and Diamondback, Spyridon “Sam” Adondakis and Jesse Tortora, told investigators that firm Primary Global Research LLC, an “expert network” company that had its phones wire-tapped starting in 2009, was charging the Wall Street firms to arrange calls between investors and public employees.

Primary Global employees would also pass along information about other companies, like their corporate earnings, to the hedge funds. Level Global paid Primary Global $210,000 a year for access to its “experts”, and Diamondback paid it $165,000.

At Diamondback, a hedge fund based in Stamford, C.T. that manages $3 billion, the investigation was focused on one analyst and a portfolio manager.

Level Global, a Greenwich, C.T. based hedge fund that told its investors it would be closing in February because of the probe, managed about $4 billion in assets when the investigation started.

Both hedge funds have said they’re cooperating with invest gators. analysts Adonadakis and Tortora used to work together at Prudential Equity Group and stayed friends after they left. They also worked with Fayad Abbasi, an analysts under investigation at Neuberger Berman.

Neuberger Berman has said they didn’t know that Abbasi was being investigated, and no one’s lawyers were willing to comment to the Journal. That includes, of course, attorneys representing Anthony Chiasson and David Ganek, Level Global’s co-founders.